Anyone have the gonads to place a wager? I know people have their opinions on if the bailout will work or pass, but does anyone have a view on what is going to happen (if anything) to these financials after the vote?
Nothing big is gonna happen…the bailout will pass and is already 50% priced in the market.
bought more UYG yesterday.
i am wagering there’s a floor under financials now. not so the rest of the market. the case by case rescues involved making an example by wiping out equity. but now, with 700B subsidy, plus possible fed rate cuts and ecb cuts to follow, the biggest balance sheet in the world is underwriting the financial system. sure, you can argue the business loans are going to go bust, commercial real estate loans will go bust (although it is only 20% of the total real estate mortgage mkt, so much smaller impact), but i think there is so much fear priced in that financials are the new safety net. argue otherwise, please, by all means, lets have a good discussion.
Sucks if you bought UYG, down 6% today. I owned it the other day when the failed to pass the bailout and I got hit for 15%. Long dollar is the play(RYSBX), relative to basket of currencies. Europe is going to fall apart.
Funny, I am recommending a trade, when I just told you I lost 15%.